Question 1

Figure 4-5 
-Refer to Figure 4-5. Which of the following would cause the demand curve to shift from Demand A to Demand B in the market for oranges in the United States?

Accepted Answer

A)   a freeze in Florida
B)   a technological advance that allows oranges to ripen faster
C)   a decrease in the price of apples
D)   an announcement by the FDA that oranges prevent heart diseaseE) A) and D)
F) None of the above

Question 2

If macaroni and cheese is an inferior good, what would happen to the equilibrium price and quantity of macaroni and cheese if consumers' incomes rise?

Accepted Answer

A)   Both the equilibrium price and quantity would increase.
B)   Both the equilibrium price and quantity would decrease.
C)   The equilibrium price would increase, and the equilibrium quantity would decrease.
D)   The equilibrium price would decrease, and the equilibrium quantity would increase.E) A) and B)
F) B) and C)

Question 3

If the price of steel, an input into the production of automobiles, rises, and at the same time the price of gasoline rises, what will happen to the equilibrium price and quantity of automobiles?

Accepted Answer

The equilibrium quan...

Question 4

For teenagers, a 10 percent increase in the price of cigarettes leads to a

Accepted Answer

A)   1 percent reduction in the quantity demanded of cigarettes.
B)   4 percent reduction in the quantity demanded of cigarettes.
C)   10 percent reduction in the quantity demanded of cigarettes.
D)   12 percent reduction in the quantity demanded of cigarettes.E) A) and B)
F) A) and C)

Question 5

Table 4-9 
-Refer to Table 4-9. Which combination would produce a decrease in equilibrium price and an indeterminate change in equilibrium quantity?

Accepted Answer

A)   A
B)   B
C)   C
D)   DE) None of the above
F) C) and D)

Question 6

A group of buyers and sellers of a particular good or service is called a(n)

Accepted Answer

A)   coalition.
B)   economy.
C)   market.
D)   competition.E) A) and B)
F) A) and C)

Question 7

A movement upward and to the left along a demand curve is called a(n)

Accepted Answer

A)   increase in demand.
B)   decrease in demand.
C)   decrease in quantity demanded.
D)   increase in quantity demanded.E) A) and B)
F) All of the above

Question 8

A market supply curve shows

Accepted Answer

A)   the total quantity supplied at all possible prices.
B)   the average quantity supplied by producers at all possible prices.
C)   how quantity supplied changes when consumer income changes.
D)   suppliers' responses, in terms of the amounts they will supply, to the demands of buyers.E) B) and D)
F) A) and C)

Question 9

What would happen to the equilibrium price and quantity of lattés if coffee shops began using a machine that reduced the amount of labor necessary to produce them?

Accepted Answer

A)   Both the equilibrium price and quantity would increase.
B)   Both the equilibrium price and quantity would decrease.
C)   The equilibrium price would increase, and the equilibrium quantity would decrease.
D)   The equilibrium price would decrease, and the equilibrium quantity would increase.E) None of the above
F) B) and C)

Question 10

Which of the following events would cause a movement downward and to the left along the supply curve for mangos?

Accepted Answer

A)   The number of sellers of mangos decreases.
B)   There is an advance in technology that reduces the cost of producing mangos.
C)   The price of mangos falls.
D)   The price of fertilizer increases, and fertilizer is an input in the production of mangos.E) A) and B)
F) All of the above

Question 11

When the price of a good is high, selling the good is profitable, and so the quantity supplied is large.

Accepted Answer

A) True 
 B)False

Question 12

A shortage exists in a market if

Accepted Answer

A)   there is an excess supply of the good.
B)   quantity supplied exceeds quantity demanded.
C)   the current price is below its equilibrium price.
D)   All of the above are correct.E) A) and B)
F) B) and D)

Question 13

Holding all other things constant, a higher price for ski lift tickets would

Accepted Answer

A)   increase the number of skiers.
B)   increase the price of skis.
C)   decrease the number of skis sold.
D)   decrease the demand for other winter recreational activities.E) None of the above
F) C) and D)

Question 14

An increase in the price of pizza will shift the demand curve for pizza to the left.

Accepted Answer

A) True 
 B)False

Question 15

The University of Iowa was voted the #1 "party school" in 2013. The University of Iowa is located in Iowa City. At the end of August each year, the market demand for beer in Iowa City

Accepted Answer

A)   decreases.
B)   increases.
C)   remains constant, but we observe a movement downward and to the right along the demand curve.
D)   remains constant, but we observe a movement upward and to the left along the demand curve.E) B) and D)
F) All of the above

Question 16

An increase in demand shifts the demand curve to the left.

Accepted Answer

A) True 
 B)False

Question 17

Figure 4-17 
-Refer to Figure 4-17. At a price of

Accepted Answer

A)   $8, there is a surplus of 6 units.
B)   $5, there is neither a shortage nor a surplus.
C)   $2, there is a shortage of 6 units.
D)   All of the above are correct.E) A) and B)
F) B) and C)

Question 18

Suppose researchers discover a new, lower cost method of producing calculators. As a result, will the supply of calculators increase or decrease?

Accepted Answer

The supply...

Question 19

Most studies indicate that tobacco and marijuana tend to be

Accepted Answer

A)   substitutes.
B)   complements.
C)   unrelated because one good is legal while the other one is illegal.
D)   inferior goods.E) B) and C)
F) A) and B)

Question 20

Which of the following would increase in response to a increase in the price of ironing boards?

Accepted Answer

A)   the quantity of irons demanded at each possible price of irons
B)   the equilibrium quantity of irons
C)   the equilibrium price of irons
D)   None of the above is correct.E) B) and D)
F) A) and B)

Exam 4: The Market Forces of Supply and Demand

A movement upward and to the left along a demand curve is called a(n)

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Suppose researchers discover a new, lower cost method of producing calculators. As a result, will the supply of calculators increase or decrease?

Correct AnswerverifiedThe supply...View AnswerShow Answer

If the price of steel, an input into the production of automobiles, rises, and at the same time the price of gasoline rises, what will happen to the equilibrium price and quantity of automobiles?

Correct AnswerverifiedThe equilibrium quan...View AnswerShow Answer

An increase in the price of pizza will shift the demand curve for pizza to the left.

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Table 4-9 -Refer to Table 4-9. Which combination would produce a decrease in equilibrium price and an indeterminate change in equilibrium quantity?

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Holding all other things constant, a higher price for ski lift tickets would

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What would happen to the equilibrium price and quantity of lattés if coffee shops began using a machine that reduced the amount of labor necessary to produce them?

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When the price of a good is high, selling the good is profitable, and so the quantity supplied is large.

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A market supply curve shows

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Figure 4-5 -Refer to Figure 4-5. Which of the following would cause the demand curve to shift from Demand A to Demand B in the market for oranges in the United States?

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The University of Iowa was voted the #1 "party school" in 2013. The University of Iowa is located in Iowa City. At the end of August each year, the market demand for beer in Iowa City

Correct AnswerverifiedShow Answer

Figure 4-17 -Refer to Figure 4-17. At a price of

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Which of the following events would cause a movement downward and to the left along the supply curve for mangos?

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An increase in demand shifts the demand curve to the left.

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For teenagers, a 10 percent increase in the price of cigarettes leads to a

Correct AnswerverifiedShow Answer

Which of the following would increase in response to a increase in the price of ironing boards?

Correct AnswerverifiedShow Answer

If macaroni and cheese is an inferior good, what would happen to the equilibrium price and quantity of macaroni and cheese if consumers' incomes rise?

Correct AnswerverifiedShow Answer

Most studies indicate that tobacco and marijuana tend to be

Correct AnswerverifiedShow Answer

A shortage exists in a market if

Correct AnswerverifiedShow Answer

A group of buyers and sellers of a particular good or service is called a(n)

Correct AnswerverifiedShow Answer

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The supply...
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The equilibrium quan...
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